Business, Legal & Accounting Glossary
Class A shares of stock are generally thought of as a preferred tier of classified stock. In many companies, Class A shares have greater voting rights than Class B shares or any other class of shares. One reason for creating this disparity in voting rights between classes of stock is to insulate company management, typically the owners of Class A shares of stock, from retail investors on Wall Street. Many companies do not offer Class A shares to the general public nor are Class A shares freely traded; only management can own Class A shares and their additional voting rights. However, it must be remembered that not all companies treat Class A shares the same way. In an effort to sell shares, some companies call their regular shares of stock Class A shares in an attempt to trick the general public into purchasing what is perceived to be preferred stock.
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This glossary post was last updated: 4th February, 2020 | 0 Views.